The Coronavirus, Commercial Real Estate and REITs

*Updated August 26*

With everyday life upended by the coronavirus for the foreseeable future, the commercial real estate industry is shifting on a daily basis. As patterns of life change for residents, customers, workers, patients, and travelers, Nareit is staying on top of the news you need to continue running your business during this tumultuous time. The page will be updated frequently with what you need to know about coronavirus as it impacts REITs and real estate today. Our REITs in the Community page highlights what REITs are doing to assist their tenants and communities in this trying time. REITs are also playing an important role in helping to reopen the economy.

August 26:

Finding Opportunities in Commercial Real Estate During the COVID-19 Crisis
Looking ahead, assessing risks and opportunities in commercial real estate depends on the shape and timing of the post-COVID-19 world, and whether changes to consumer and renter behavior are transient or permanent. Short-term earnings and operating performance may be indicative of long-term trends, or may be crisis-only impacts.

August 24:

REIT Operating Performance Points to Upside Potential in the Year Ahead
The economy continues to experience a high degree of uncertainty, but operating performance across the REIT industry indicates that there could be some upside potential in the year ahead, said Nareit Senior Economist Calvin Schnure.

REIT Returns Treading Water in Recent Weeks
REIT share prices were little changed last week. The FTSE Nareit All Equity REITs index was down 0.3% in terms of total return. Several sectors declined, including Lodging/Resorts (with a total return of -6.1%), Retail (-3.2%), as well as both Home Financing and Commercial Financing mREITs (total returns of -2.5% and -2.8%, respectively).

August 17:

REIT Stock Returns Mixed Last Week
REIT stock market performance was mixed last week. The overall FTSE Nareit All Equity REITs index was down 1.8% in terms of total return.

Retail Sales Continued to Rebound in July, Supporting Retail REITs
Retail sales data for July point to a resumption in consumer spending, providing a boost for the retail REIT sector that has been under pressure throughout the coronavirus crisis, according to Nareit Senior Economist Calvin Schnure.

August 10:

Latest Economic News Mostly Positive, But Highlights Need for Additional Stimulus Measures
Economic reports released in the past week were mostly positive, but with millions still unemployed and benefits expiring, the need for additional stimulus measures remains, according to Nareit Senior Economist Calvin Schnure.

Nareit Hawaii Donates $20,000 Worth of Face Masks to Construction Workers
In late July, Nareit Hawaii donated $20,000 worth of face masks to the Operating Engineers, Local 3, to help their 3,500 members stay healthy and avoid COVID-19 on the job and in the community.

REITs Rose Again Last Week
REIT share prices rose last week, with a total return of 1.2% on the FTSE Nareit All Equity REITs index. This was the second consecutive increase, and there have been overall gains in four of the past six weeks.

August 3:

REITs Rose Last Week to Finish July in Positive Territory
REIT share prices rose last week with the FTSE Nareit All Equity REITs index posting a positive return of 4.2%.

July 31:

Real Estate Deal Activity Falls in First Half; Recovery Possible by Q4: PwC
The total value and volume of real estate deals across all property sectors declined in the first half of the year compared to the previous six months, but activity is expected to recover by the fourth quarter, according to Tim Bodner, partner and U.S. real estate deals leader at PwC.

July 30:

Innovation in Office Sector Only Going to Accelerate Post-COVID
Whelan told the REIT Report that innovation will be accelerated in large part by the success of the remote work model during the crisis. “The office is now becoming just one place among a network of locations where work gets done, so of course the role of it is going to accordingly change,” she said.

Prologis CEO Expects Shift Away from Lean Supply Chain Strategy Post-COVID
Just-in-time supply chain strategies that have been in place for decades are likely to switch to a just-in-case approach in response to COVID-19, as well as recent natural disasters and trade disruptions, according to Prologis, Inc. Chairman and CEO Hamid Moghadam.

July 27:

Little Change in REITs, Broader Equity Market Last Week
Markets ended with little change last week as the FTSE Nareit All Equity REITs index had a total return of -0.6%, reversing the small gains from the prior week. Broad equity markets were down as well, with a -0.3% total return on the Russell 1000.

July 29:

Commercial Real Estate Markets Weaken in Second Quarter
Commercial real estate markets weakened in the second quarter as the COVID-19 pandemic, social distancing, and temporary closures impacted all major property sectors. Demand weakened even as construction projects initiated well ahead of the pandemic continued to be delivered to the market, leading to a rise in vacancy rates and softening of market rents.

Housing Data Point to Economy’s Underlying Strength, Assuming Continued Reopening
The economy continued to rebound in June, according to housing market data released last week, although the outlook depends on the reopening continuing on its current path—an open question at this point, Nareit Senior Economist Calvin Schnure said.

July 22:

REIT Earnings, GDP Growth and the Pandemic
Due the highly unusual nature of this recession, uncertainty about the path of the pandemic, and the potential for a robust recovery, in upcoming earnings announcements the management’s view of market conditions and discussion of the outlook are likely to attract at least as much attention as FFO.

July 21:

REIT Market Quiet Ahead of Earnings Season
Most property sectors recorded small gains to increases in the high single-digits, led by timber REITs (8.3% total return) and specialty REITs (4.4% total return).

July 20:

REIT Industry July 2020 Rent Survey Results
Nareit has conducted its fourth monthly survey of REIT rent collections in the wake of the COVID-19 pandemic and related economic dislocation. The July results show another large improvement for the retail subsectors for free standing and shopping center-focused REITs following substantial improvement in June.

Economic Data Show Potential for Rebound, But Dependent on Continued Reopening
Economic data released last week show a lot of potential for rebound—as long as the reopening can continue to proceed, according to Nareit Senior Economist Calvin Schnure.

July 16:

Family Rental Housing Segment Plays Key Future Role, ULI Expert Says
Family renter households are likely to account for a growing share of the overall renter pool as the millennial generation begins to raise families and create homes of their own, says Christopher Ptomey, executive director of the Urban Land institute’s Terwilliger Center for Housing.

Green Street Sees Gateway Cities, Core REIT Sectors Under Pressure
Gateway cities are likely to come under increasing pressure as a result of economic and cultural shifts triggered by the coronavirus crisis, according to Mike Kirby, Green Street Advisors’ co-founder and director of research.

July 14:

New State Closures Place Additional Strain on REIT Tenants
A rollback of state reopening plans across the United States is placing additional strain on REIT tenants, especially those in the retail real estate segment, according to Jim Sullivan, managing director and REIT analyst at BTIG.

REIT Stock Prices Declined Last Week; Volatility Lower, Too
REIT share prices declined last week, with the FTSE Nareit All Equity REITs total return index down 2.3%. Most property sectors were down, led by retail REITs (total return of -6.0%) and residential REITs (total return -4.5%), but timber and infrastructure REITs rose 5.9% and 0.3%, respectively.

July 13:

REITs, Economy Remain Under Pressure as Coronavirus Case Numbers Climb
REIT share prices edged lower last week, as both the broader economy and also the real estate sector continue to be buffeted by the opposing forces of economic reopening and the spread of the virus, according to Nareit Senior Economist Calvin Schnure.

Pandemic Crisis Points to Need for Business Continuity Insurance
As the business shutdown resulting from the COVID-19 pandemic continues to weigh on the economy, Nareit and other business groups in the newly-formed Coalition for Business Continuity are working with public policymakers to find ways to reduce the economic damage from new outbreaks of COVID-19, as well as future pandemics and other national emergencies.

July 10:

REIT Access to Capital Maintained During Pandemic
REITs have maintained access to capital markets, unimpeded so far by the pandemic. Total capital raised in the second quarter, including common and preferred equity and unsecured debt, was $30.9 billion, up 11% from the first quarter and 25% higher than one year ago.

July 8:

Solving One of the Job Market Mysteries of the Pandemic
The high level of claims week after week raised fears that new rounds of layoffs may be spreading from the sectors initially hit by the crisis—hospitality, restaurants and bars, retail stores—to the rest of the economy, and perhaps warning of greater damage from the shutdowns.

July 7:

REIT Valuation Levels Attracting Investor Attention
LaSalle Investment Management Securities Global CEO Lisa Kaufman said REITs are attracting investor attention on the basis that they currently offer “very good value” relative to the private market, as well as on a historic basis relative to equities and bonds.

July 6:

June Employment Numbers Show Commercial Real Estate Heading in Right Direction
Nareit Senior Economist Calvin Schnure said the June employment numbers released last week were a “welcome positive surprise” that shows commercial real estate is heading in the right direction.

How Has the Lockdown Impacted Commercial Real Estate Sales and Prices?
The most visible sign of this lockdown is the collapse of sales transactions, which fell sharply as social distancing rules went into effect.

REITs Rebounded Last Week
REITs rebounded last week with a 5.2% total return, according to the FTSE Nareit All Equity REITs index, ending a string of declines over the three prior weeks.

July 2:

CMBS Delinquencies Continued to Climb in June
CMBS delinquencies continued to climb in June, with the share of loans that are 30 days or more delinquent climbing 317 basis points, to 10.32%. This is still below the peak delinquency rate recorded in 2012, according to Trepp.

July 1:

Strong Balance Sheet Imperative to Weather COVID-19 Crisis
Jeff Horowitz of BofA Securities says very few REITs have maturity issues, a business differentiator during the pandemic.

REITs Have Maintained Technological Savviness During Pandemic
Rich Anderson of SMBC Nikko Securities America says this will help REITs recapture lost ground.

June 30:

All REIT Sectors Declined Last Week
All property sectors of the REIT universe declined last week as a surge in new cases of COVID-19 in many states raised concerns that the economic reopening may be delayed.

REIT Management Teams Have Learned Important Lessons from Great Financial Crisis
Capital One’s Greg Steele says focus in recent months has been on managing cash and liquidity.

June 25:

Many Commercial Real Estate Sectors Faring Well, Despite Economic Shock
Nareit Senior Economist Calvin Schnure told an AEI panel discussion that several commercial real estate sectors are holding up well, despite the size of the economic shock resulting from COVID-19.

June 24:

REIT Industry June Rent Collection Data
The June results show an improvement for most sectors compared with last month with large improvements in the retail subsectors for free standing and shopping center-focused REITs.

June 19:

REITs Bolstered by Stimulus Measures, Functioning Capital Markets, & Broad Array of Financing Options
AEW Capital Management’s Gina Szymanski expects niche REIT segments to be “incredibly resilient.”

June 17:

Green Street Sees Increased Online Retail as Tailwind for Industrial REITs
Pierre Rigaud, vice president of advisory and consulting at Green Street Advisors, said that although the REIT market has been down overall the past few months, the ultimate impact on property value in the long-term should be limited to short-term disruptions.

Green Street Looks to Assess Gaming Tenants’ Rent-Paying Abilities in a Zero-Revenue Environment
Spenser Allaway, net lease, gaming, and self-storage analyst at Green Street Advisors, discussed the overlapping characteristics between the gaming sector and the traditional net lease space, noting that the primary commonality is the lease structure, and the primary differentiator is the tenant base.

June 16:

Lingering Fears Weighed on REITs, Broader Market Last Week
The FTSE Nareit All Equity REITs index posted total returns of negative 4.5%. Broader markets were down as well, with the Russell 1000 reversing nearly all the gains of the prior week.

June 15:

CIAT Submits Comments to Treasury Regarding Terrorism Risk Insurance Program
Last fall, Congress adopted legislation reauthorizing TRIP for seven years until 2027. CIAT’s comments were in made in advance of the FIO’s biennial report to Congress on the effectiveness of TRIP.

REITs in Push-Pull Situation Between Efforts to Reopen Economy and Progress on Health Front
In the latest edition of the REIT Report, Nareit Senior Economist Calvin Schnure said investors will be watching this week to see if economic indicators point to an uptrend similar to what was seen in the recently-released May unemployment report.

June 12:

Financial Service Firms Face Complex Challenges Returning to the Office: Deloitte
Deloitte’s Darin Buelow sees firms taking a cautious approach to workplace re-entry.

Green Street Sees U.S. in Deep Recession; Digital Economy Sectors Expected to Fare Better
Green Street’s Michael Knott says economic damage will “leave some scar” on property values.

June 11:

Easterly Government Properties CEO Says Acquisition Pipeline “Larger than Usual”
Easterly’s tenant roster focuses on three dozen government agencies, including the Federal Bureau of Investigation, the Drug Enforcement Agency, Veterans Affairs, the Food and Drug Administration, and the federal courts.

REITs and Real Estate Poised to Begin Recovery Along with Economy
The good news about the outlook for the economy and commercial real estate as of early June is that we are likely at a turning point for labor markets, consumer spending, and business activity. The bad news is that the early stages of recovery will be tentative and uneven.

June 10:

Simon Ends Merger Agreement with Taubman, Citing COVID-19 Issues
The proposed merger was first announced in February, when Simon said it had agreed to take a controlling stake in fellow retail real estate REIT Taubman Centers in a cash deal valued at approximately $3.6 billion.

June 9:

COPT’s Defense-Related Tenant Base Insulates REIT from COVID-19 Market Uncertainty
CEO Stephen Budorick expects COPT to achieve 1 million square feet of development leasing in 2020.

June 8:

HPET CEO Says COVID-19 Crisis Will Attract Visionary Impact Investors to Affordable Housing
Anne McCulloch expects acquisition opportunities at "better prices than we’ve seen in a long time."

Global Net Lease’s Diverse Portfolio Playing Large Role in Successful Rent Collection
CEO James Nelson says REIT remains acquisitive but is taking a cautious approach.

OCC Urges Banks to Support mREITs and Other Non-bank Lenders
Responding to a letter co-authored by Nareit, OCC affirms that prior flexibility guidance applies to mREITs.

President Trump Signs Paycheck Protection Program Flexibility into Law
H.R. 7010 reduces certain restrictions for borrowers of the small business PPP loan program enacted as part of the CARES Act in March.

June 5:

Gladstone Land CEO Says Farm Tenants in “Great Shape”
David Gladstone expects produce prices to remain elevated until economy opens further.

W.P. Carey CEO Touts Benefits of Net Lease Portfolio Diversification
Jason Fox says REIT likely to be more active in second half on warehouse and industrial sale-leasebacks.

June 4:

CMBS Delinquencies Soar in May
The percentage of mortgages held in commercial mortgage-backed securities (CMBS) that were 30+ days delinquent jumped from 2.29% in April to 7.15% in May due to tenants who have lost business during the COVID-19 crisis.

Duke Realty CEO Pleased with Overall Deal Velocity and Ability to Lease Space
Jim Connor says REIT could accelerate development later in 2020 if leasing and occupancy levels hold.

Prologis Anticipates Being Well-Positioned with Customers Post-COVID-19
COO Gary Anderson said Prologis has invested in digital infrastructure and its customers throughout the pandemic.

June 3:

Business Leaders Play Essential Role in Moving Toward Safe Reopening of Economy
Business leaders play an essential role in moving their companies and the broader economy toward a safe reopening following nearly three months of COVID-19-related shutdown, according to a panel of REIT CEOs speaking June 2, the first day of Nareit’s REITweek: Virtual Investor Conference.

STORE Capital’s Close Relationship with Tenants Provides Insight into Impact of COVID-19
CEO Chris Volk says acquisitions in 2020 will be “meaningfully less” than original $1.2 billion target.

American Finance Trust Benefiting from Focus on Investment Grade Critical Retail Tenants
CEO Michael Weil says REIT is taking a prudent approach to acquisitions.

Impact of COVID-19 on the REIT Industry: Outlook and Opportunities
Join FTSE Russell, Nareit, and Wilshire Associates for a webinar on June 16 at 2:00 p.m. EDT.

June 2:

REITs Up Again Last Week, Gaining in Four Out of the Past Five Weeks
REITs gained last week, and have been up four out of the past five weeks. The FTSE Nareit All Equity REITs index posted a total return of 5.2%, a bit ahead of the 3.1% return on the Russell 1000..

REIT CEOs Discuss the Importance of Crisis Communications on Nareit IR Symposium Panel
In a CEO Spotlight session at Nareit’s 2020 REIT Investor Relations Symposium, CEOs from four REITs discussed the importance of crisis communications.

Nareit IR Symposium Panelists Applaud REITs’ Increased Disclosure During COVID-19 Crisis
Panelists at Nareit’s 2020 REIT Investor Relations Symposium, held June 1, reflected on the first quarter earnings season and their expectations for REIT management teams going forward.

iStar Working on Educating Investors on Value of Largest Investment—Safehold
CEO Jay Sugarman sees “pretty big disconnect” between iStar market value and share price.

Public Sentiment Toward Resuming Pre-COVID-19 Activities Seeing a “Tremendous Shift”
Engagious’ Rich Thau sees many unanswered questions and anxiety surrounding the return to work.

June 1:

Bluerock Residential CEO Says Focus on Knowledge Economy Worker Proving Beneficial
Ramin Kamfar says REIT has “significant amount” of cash and access to capital.

CyrusOne Expects Europe to Represent a Growing Share of Overall Business
Interim CEO Tesh Durvasula says REIT is “cautiously optimistic” for rest of 2020.

Revised California “Split Roll” Property Tax Initiative Formally Qualifies for November 2020 Ballot
Supporters of a California initiative to overturn Proposition 13 (which limits property tax increases absent a change in ownership) for commercial properties have formally qualified a revised initiative for the November 2020 ballot.

Regency Centers Sees Grocery-Anchored Retail Remaining Essential Post-Pandemic
CEO Lisa Palmer says that while online ordering trends have accelerated, in-store experiences will ultimately return.

May 31:

California Bill Allowing Commercial Tenants to Renegotiate and Terminate Leases Advances in Senate
On May 22, the California Senate Judiciary Committee voted to approve SB 939. Among other things, SB 939 would allow certain commercial tenants negatively affected by the COVID-19 crisis to require landlords to renegotiate and/or terminate their leases.

May 30:

House Passes Paycheck Protection Program Flexibility Act 417-1
On May 28, the House of Representatives overwhelmingly passed HR 7010, legislation that would reduce certain restrictions for borrowers of the small business PPP loan program enacted as part of the CARES Act in March.

Hawaii State Legislature Reconvened for 10 Days in May
The Hawaii State Legislature reconvened on May 11 and recessed again on May 21, 2020. Legislators ultimately passed measures relating to the State Budget, which included funding for shovel-ready capital improvement projects, allocating federal CARES Act funds, and making up a projected $1 billion shortfall.

Legislation Would Ensure Federal Insurance Against Pandemics
Rep. Carolyn Maloney (D-N.Y.) and 20 other Democratic members of congress recently introduced H.R. 7011, the Pandemic Risk Insurance Act of 2020 (PRIA).

May 29:

Job Markets, Business Reopenings Signal Coming Turnaround for CRE, REITs
The gradual reopening of the economy in the weeks and months ahead will restart the cash flows for many businesses small and large. This resumption of business activity will help ease some of the current pressures on commercial real estate markets as tenants generate the sales needed to meet rent payments, as well as payrolls, suppliers, loans and other obligations.

Commercial Real Estate Recruiting Specialist Expects Pick-Up in Hiring
Marc Torrey, vice president and global sales director at SelectLeaders, explained that the landscape for commercial real estate hiring heading into the coronavirus crisis reflected a typical trend seen in an election year: a slow down on the transaction hiring side and a pick-up on the operations and asset management side.

Safehold Gaining Ground as Portfolio Growth Exceeds 100%
CEO Jay Sugarman says REIT’s strategy is even more attractive in current environment.

Agree Realty Increases Acquisition Guidance Amidst Market Dislocation
CEO Joey Agree says REIT’s focus is on top retailers, including Walmart.

May 28:

CubeSmart Eyeing Increased Use of Contactless Rental Options for Self-Storage Customers
CEO Chris Marr says results of contactless platform so far have been “incredibly positive.”

May 27:

REIT Property Sectors All Rose Last Week
REIT property sectors posted positive returns across the board last week as attention turned towards reopening the economy. The FTSE Nareit All Equity REITs index posted a total return of 6.9%, the strongest weekly return in six weeks and outpacing the 3.5% total return on the Russell 1000.

American Tower CEO Says REIT’s Investment Thesis is “Unwavering”
Tom Bartlett expects continued growth in markets outside the U.S.

Armada Hoffler CEO Sees Development Opportunities Emerging in Late 2020, 2021
Lou Haddad expects some tenants to be in full expansion mode in 2021 or 2022.

ULI Real Estate Economic Forecast Sees REIT Returns Down 18% in 2020 But Rallying in 2021 and 2022
The Urban Land Institute’s latest Real Estate Economic Forecast points to REIT returns averaging minus 18% in 2020 but rallying in both 2021 and 2022 with returns of 10%.

May 26:

Webinar: Commercial Real Estate’s Great Restart Brings Opportunity, Challenges
Nareit and Bloomberg Intelligence are partnering on an upcoming webinar to discuss how REITs have navigated the pandemic, how they are managing the logistical and financial challenges of reopening, and how REIT business models may need to change to adapt to a new post-pandemic marketplace.

REIT Earnings Fell 9% in the First Quarter as COVID-19 Crisis Hit Travel, Shopping
Speaking May 26 on the Nareit REIT Report podcast, Nareit Senior Economist Calvin Schnure noted that industrial REITs had a 21.7% increase in FFO, and single family home REITs saw a 7% FFO increase.

American Homes 4 Rent Says Single Family Rental Home Demand is Surpassing Expectations
CEO David Singelyn sees move away from high-density living.

Highwoods CEO Sees End to Office Densification Trend
Ted Klinck says de-densification of office space could offset increase in remote working.

May 22:

The Outlook for REITs During the COVID-19 Crisis
The REIT sector overall entered this period, however, from a stronger position than in previous market downturns, in terms of operational performance, balance sheet strength and sources of liquidity available for the potentially lean months ahead. This financial strength provides support for the medium- and long-term outlook for investing in REITs.

STAG Industrial’s Leverage Is About the Lowest the REIT Has Ever Seen
CEO Ben Butcher says the company is in a great position to take advantage of dislocation when it should occur.

Kimco Realty CEO Says REIT Positioned to Benefit From Potential Market Dislocation
Conor Flynn says Kimco has transformed portfolio and prioritized liquidity.

Weingarten Realty CEO Says Improved Portfolio Metrics Will Help REIT Navigate Crisis
Drew Alexander sees dominance of omnichannel model in future retail landscape.

Commercial Real Estate Firms Beginning to Implement Lessons from COVID-19 Crisis
Deloitte’s Jim Berry says it is “critical’ for firms to be agile and work with tenants to problem solve.

May 21:

REIT Earnings Declined 9% in First Quarter on COVID-19 Issues
REIT earnings were impacted by the COVID-19 crisis in the first quarter, with funds from operation (FFO) declining 9.0% from the prior quarter, to $15.0 billion, according to the Nareit T-Tracker®.

May 20:

Crown Castle CEO Sees Long Term Gains from Increased Consumer Usage, 5G, Edge Networks
In a video interview in conjunction with Nareit’s REITweek 2020 Virtual Investor Conference, president and CEO of Crown Castle International Corp. Jay Brown noted that “consumers are relying on these networks more heavily today than we were even a few months ago.” At the same time, the wireless carriers have been very public about their intention of continuing to build out their 5G networks, he said.

Green Street Sees Future Office Sector Demand Shaped by Densification, Remote Working Trends
The demand for office sector space going forward will be shaped by two main factors—densification and remote working, according to Danny Ismail, senior analyst at Green Street Advisors.

May 19:

Fed Chair Says U.S. Recovery Could Take Until End of 2021
Nareit Senior Economist Calvin Schnure joined Cheddar to discuss Jerome Powell’s prediction that the road to economic recovery could last longer than some are expecting.

May 18:

Rent Collected by REITs in May Unchanged from April
To assess rent collections in the wake of the COVID-19 pandemic and related closures, Nareit has surveyed its membership about monthly rent collections for April and May. The most recent results show that on average for REITs, the share of typical rent collected in May was largely unchanged from April.

House of Representatives Passes HEROES ACT
On May 15, 2020, the House of Representatives passed the $3 trillion HEROES Act, aimed at providing another round of financial relief for people and businesses impacted by the pandemic. Its narrow passage of 208 votes in favor to 199 against indicates the uphill battle it may face in a Republican-controlled Senate and at the desk of a president who has called it “dead on arrival.”

Nareit Joins Coalition Opposing California Legislation that Would Negate Many Commercial Leases
In a May 15, 2020, letter to members of the California Senate Judiciary Committee, Nareit and a group of industry organizations expressed opposition to SB 939, which, among other things, would allow many commercial tenants affected by the COVID-19 crisis to defer rent obligations for more than one year, renegotiate leases with landlords, and terminate certain leases.

Data Show April Online Retail Sales Gains Unable to Offset Broader Declines
Speaking May 18 on the Nareit REIT Report podcast, Nareit Senior Economist Calvin Schnure noted that the more than 8% rise in non-store retail sales in April, which includes e-commerce, was unable to offset the overall decline of 16.4%.

May 15:

Hudson Pacific Implementing New Operating Procedures in Response to COVID-19
Speaking on the Nareit REIT Report podcast, Natalie Teear, vice president of sustainability and social impact at Hudson Pacific, said the REIT is rolling out a “four-C’s” approach that encompasses communication, confidence, convenience, and cooperation.

Nareit Joins Coalition Request Seeking Clear Communication between Banks and Borrowers
11 trade groups asked bank regulators to encourage banks to work constructively with all borrowers affected by COVID-19.

May 14:

Growing Dry Powder Pool May Boost Economic Recovery, REITs
If recent trends continue, by the time the economy reopens there could be as much as $4 trillion in consumer spending power available to help jump-start the economy.

May 13:

REIT Industry’s Focus on Tenant Needs Seen as Key Issue Post-Crisis
Speaking on the Nareit REIT Report podcast, Goodwin's Gil Menna said one of the ways that REITs can be opportunistic in the current environment is by focusing on unique ways to deal with tenancy concerns that evolve from the pandemic.

May 11:

REIT Markets Edged Higher for the Second Week; Volatility is Down
Most sectors were up, including a 10.3% total return for timber REITs, a 6.9% total return for specialty REITs and 6.7% total return for commercial financing mREITs.

April Jobs Report Shows Bulk of Losses in Front-Line Sectors
Nareit Senior Economist Calvin Schnure said that while the April jobs report was “clearly a shock to the economy,” the bulk of job losses were confined to a few sectors facing complete shutdowns.

Nareit Recommends IASB Expand Accounting Relief for COVID-19-Related Rent Concessions to Lessors
In response to the global COVID-19 pandemic, the IASB proposed for rent concessions for lessees only. Nareit recommended that the IASB extend the accounting relief to include lessors as well.

Nareit Supports Bipartisan Effort to Boost Businesses Hardest Hit by the COVID-19 Crisis
Nareit supports a recently announced effort by U.S. Senators Michael Bennet (D-Colo.) and Todd Young (R-Ind.) to create a new RESTART loan program to support business continuity for the remainder of 2020.

May 8:

April Employment Report Shows Record Job Losses, Unemployment
The two largest risks to the economy from these layoffs are that job losses spread from the front-line sectors that were hit first by social distancing into the broader economy, and that temporary layoffs translate into permanent job losses. So far, neither of these is apparent in the April employment data.

Interview with TDAmeritrade
Nareit senior economist Calvin Schnure discusses the latest unemployment numbers due to the COVID-19 crisis.

Industry Leaders Convene to Discuss the Impact of COVID-19 on Commercial Real Estate and the Global Economy
Leaders of six real estate associations and councils gathered Wednesday, May 6, 2020 to share regional perspectives on the global impact of COVID-19 on the commercial real estate sector.

May 6:

Life Science Real Estate Expected to See Even Stronger Demand Post-Pandemic
While the coronavirus crisis could cause some short-term disruption to the life science real estate sector, analysts say the COVID-19 pandemic will only fuel future demand for life science research and development—and the space that houses it.

The Importance of Real Estate and Rent in Reopening the Economy
With the reopening of the economy now beginning in phases across the country, the focus for so many businesses, including for REITs and real estate companies, is increasingly on how to responsibly reopen places of business and over time resume a full range of economic activity in a safe and healthy manner.

May 4:

Retail Real Estate Pioneering New Strategies for a Post-COVID 19 Return to Business
Speaking May 4 on the Nareit REIT Report, Nareit Senior Economist Calvin Schnure pointed to the various new safety measures that Simon Property Group, Inc. has implemented in order to reopen some of its malls.

Updated REIT Industry April Rent Collections
In a recent market commentary Nareit released results from its membership survey about the impact the COVID-19 pandemic had on April rent collection. Since the survey, many REITs have publicly disclosed rent collections for April. Using the public data along with the privately collected Nareit data, this research note presents a fuller picture of the industry’s rent collection for April.

Most REIT Sectors Edged Higher Last Week
Most REIT sectors edged higher last week, with nine of 14 REIT sectors posting a positive total return. Some of the largest gains were among industries that had experienced bigger declines as the covid-19 crisis unfolded, including retail (total return of 14.6% last week), commercial financing mortgage REITs (11.8%), diversified (8.2%) and lodging/resorts (7.9%).

REIT Magazine Transitioning to Temporary Digital Format
Since the COVID-19 pandemic has caused many REIT member companies to work remotely, Nareit has decided to temporarily move REIT magazine to a digital-only format.

Treasury Department and the IRS Allow Public REITs to Use up to 90% Stock to Satisfy Their Distribution Requirements Through 2020
Nareit requested this temporary increase in a letter dated March 18, 2020 so that REITs would have the election to conserve liquidity during the current pandemic crisis.

May 1:

Kite Realty Offers Tenants a “Bridge to the Other Side” Through Small Business Loan Program
In the May 1 edition of the REIT Report, CEO John Kite said the company is “on the front lines of this thing as it relates to the small business community.” The KRG Small Business Loan program will provide up to $5 million in total assistance and allow Kite’s small business tenants to request a loan amount of up to three months of operating expenses.

Nareit Discusses the Impact of COVID-19 on Commercial Real Estate and REITs During NCTR Webinar
Nareit’s Investor Outreach team joined the National Council on Teacher Retirement for a webinar to discuss the impact of COVID-19 on commercial real estate and REITs. More than 30 attendees registered for the webinar, representing more than 16 pension plans, investment consulting firms, and asset managers.

As Stores Re-Open This Month Will Mall REITs Get Their Rent?
When the stay at home rules are lifted, will people be out in force? We won’t know until we actually see what is happening, says Nareit’s John Worth.

Calvin Schnure Interview with Bloomberg Radio's Sound On
Nareit senior economist Calvin Schnure discusses COVID-19's impact on unemployment and the market in general with Bloomberg Radio.

April 30:

REIT Industry’s Footprint in Non-Traditional Asset Classes Seen as Post-Crisis Advantage
The REIT industry’s “heavy footprint” in non-traditional asset classes gives it a clear advantage as the world adapts to new ways of living in response to the coronavirus crisis, said Scott Crowe, Chief Investment Strategist at CenterSquare Investment Management.

April 29:

COVID-19 Shutdowns Impacted CRE Markets Right Away
The business closures and social distancing designed to slow the spread of COVID-19 did not take affect until the final few weeks of the first quarter, but they had a significant impact on demand for commercial real estate, vacancies and rent growth across the major property sectors.

April 27:

Market Conditions Calm a bit for REIT Returns
Stock market conditions have calmed down a bit, with more moderate moves lately in the FTSE Nareit All Equity REITs index. Last week the index posted a total return of negative 4.5%, the second week of single-digit moves after much sharper gyrations both up and down in the early stages of the crisis.

REIT Markets Lower, But Conditions Appear to be Settling
While REIT share prices drifted lower in the past week, conditions appear to have settled somewhat compared to the large swings seen in the early weeks of the coronavirus crisis, said Nareit Senior Economist Calvin Schnure.

Nareit to Partner on NCTR Webinar
Nareit will partner with the National Council on Teacher Retirement (NCTR) on an April 29 webinar titled “Impact of COVID-19 on Commercial Real Estate and REITs.” NCTR’s membership includes 63 state, territorial, and local pension systems that serve more than 19 million active and retired teachers and other public employees. These 63 systems have combined pension and retirement assets exceeding $2 trillion under management.

US REIT rent tracker: Manufactured home REITs collect majority of rent due April
In a Nareit survey of FTSE Nareit All Equity REIT index constituents conducted between April 8 and April 15, industrial REIT respondents reported collecting 99.2% of their April rent, on a market-cap-weighted basis, followed by apartment REITs at 93.5%.

April 26:

American Campus Communities Helping Students Weather Coronavirus Disruptions
Speaking on the Nareit REIT Report podcast, CEO Bill Bayless said the company’s Resident Hardship Program ensures students can complete their online education in an academically oriented environment without facing late fees, online payment fees, financially-related evictions, or any negative impact to their credit reports if they and their families are facing financial disruption.

April 24:

COVID-19 Driving Cap Rate Expansion, Could Lead to Pricing Disconnect for Senior Living
While the COVID-19 pandemic will surely cause major disruptions in the short-term, the senior housing industry is still a good long-term bet if the economy rebounds relatively quickly.

Weakness in Durable Goods Orders Focused on Transportation
Signs of the impact on the economy of social distancing to slow the spread of covid-19 are showing up everywhere, from store closures and conferences that are cancelled, to millions filing for unemployment insurance. It is important, however, to distinguish between declines that are focused narrowly on those sectors feeling the direct impact of closures versus damage that may be spreading more broadly throughout the economy.

April 22:

Social Aspect of ESG Expected to Gain Attention in Response to Coronavirus
Speaking on the Nareit REIT Report podcast, Nareit Senior Vice President for ESG Issues Fulya Kocak said that while attention to social matters was already gaining a lot of interest before the crisis, “after we return to our new normal we are going to see more focus on health and wellness as well as flexibility and adaptation of the workforce to different ways of getting things done.”

April 20:

REIT Share Prices Little Changed Last Week, Q1 Earnings Season Opens Soon
REIT share prices declined last week, with a total return of -3.6% on the FTSE-Nareit All Equity REITs index. In more normal times a weekly move up or down of nearly 4% would be major news, but in a period of heightened volatility during the covid-19 crisis, this is the smallest move in quite a while.

Nareit Member Survey Results on COVID-19 and April Rent Collections
Nareit surveyed its listed equity REIT membership about the impact the COVID-19 pandemic is having on April rent collections. Fifty-four listed equity REITs responded between April 8 and April 15, representing most property sectors and almost $418 billion in equity market capitalization or 44% of the FTSE Nareit All Equity REIT equity market capitalization.

Nareit Joins with Other Groups Asking the Treasury Department to Clarify Temporary Like-Kind Exchange Relief
The letter to the Treasury Department seeks clarification that the deadline extension relief be automatic but not mandatory.

April 17:

Joint Trades Request for Additional Support of Commercial Mortgage Markets
On April 14, Nareit, together with five other groups representing commercial real estate interests, submitted a letter to the leadership of the Federal Reserve Board, the Treasury Department, the Federal Reserve Bank of New York, and the Federal Housing Finance Agency, urging that the Term Asset Backed Securities Facility (TALF) program, which was reinstated last month, be broadened.

Nareit and 15 Groups Submit Comment on CRE Eligibility for PPP
Concerned by the confusion arising from the interim rules governing the eligibility of commercial real estate (CRE) companies, including REITs, for loans under the Payroll Protection Program (PPP) created by the recent Coronavirus Aid, Relief, and Economic Security (CARES) Act, Nareit and 15 other groups submitted comments on April 16 urging clarification.

April 16:

David Simon, Steve Roth Among CEOs Named to Great American Economic Revival List
Two REITs and their CEOs have been named to the real estate section of a list of 15 industries that have been included on the Great American Economic Revival list, which is part of a new White House economic task force focused on reopening the economy after the coronavirus shutdown.

Kimco Realty is Helping Small Retail Tenants Survive the Financial Impact of Coronavirus
Kimco Realty Corp. CEO Conor Flynn said the REIT’s large national retail tenants need to pay their rent so that financial assistance can get to where it is needed most—small shop retailers. Flynn—who was recently diagnosed with COVID-19 and suffered mild symptoms—outlined the REIT’s efforts to help its ‘mom and pop’ tenants, including rent deferral and its new Tenant Assistance Program.

April 15:

Dynex Capital Assessing Risks and Returns of Investment Opportunities
“We feel we’re in a good position today, with flexibility, liquidity, and capital to deploy,” President, CEO, and Co-CIO Byron Boston said during an April 15 investor update call. In light of the uncertainty, Dynex is taking a balanced approach to the future, he said, “so that we’re prepared to manage our business in a variety of scenarios.”

April 14:

Data Center REITs Poised to Benefit from Increased Reliance on Technology
Data center REIT returns rose 8.8% in the first quarter as broader markets declined. For the year to April 13, returns in the sector were 12.4% higher. Spencer Kurn, analyst at New Street Research, pointed out that “the secular tailwinds are so powerful for data centers…the thirst for data consumption seems to be unrelenting.”

Policy Moves Sparked Rebound in REITs, S&P 500 Last Week
Stock market posted their strongest weekly return in many years last week, despite having only four trading days due to the Good Friday holiday. The FTSE-Nareit All Equity REITs index recorded a total return of 22.28%, reversing a portion of the steep declines as the covid-19 crisis intensified during the month of March. The S&P 500 also delivered a double-digit performance, although the 12.15% total return lagged REITs by a wide margin.

REITs are helping their tenants and communities in a variety of ways during the coronavirus crisis.

Submission letter: Joint Trades Request for Additional Support of Commercial Mortgage Markets

April 13:

REIT Markets Settling into Middle Range Following Sharp Declines in March
In an April 13 REIT Report podcast interview, Nareit senior economist Calvin Schnure noted that REITs are down 13% to 15% this year, representing a significant discount. However, “the markets appear to have settled into a middle range. You’re no longer seeing the very sharp declines that we saw in March and they’re looking forward to the period when this virus is more under control and the economy can get back to work—commercial real estate included.”

Spirit Realty Expects to Receive 65-70% of April Rent by Month’s End
Speaking on an April 13 investor call, Hsieh said nine of Spirit’s top 10 tenants are paying April rent. He added that 17 of the company’s top 20 tenants are paying April rent, including one that made a partial payment on some of their stores.

Interview with Bloomberg Radio
Nareit economist Calvin Schnure joins Bllomber Radio to discuss the latest impact of COVID-19 on unemployment and the economy. He explained, “You can’t have a healthy economy if you don’t have healthy workers.”

April 10:

Camden Property Trust CEO Expresses Optimism on Residents’ Ability and Willingness to Pay Rent
Ric Campo, chairman and CEO of Camden Property Trust, discussed the REIT’s efforts to help its residents weather the crisis, including the establishment of a $5 million tenant relief grant. He explained that Camden wanted to help fill the gap between when a resident might have lost a job and the receipt of federal benefits.

April 9:

Interview with Yahoo Finance
Nareit economist Calvin Schnure joins Yahoo Finance to discuss interest rates and coronavirus-related disruptions to the economy.

FASB Staff Grants Accounting Policy Election to Avoid Complex Lease Modification Accounting for Lease Concessions related to COVID-19
On April 8, the Financial Accounting Standards Board (FASB) held a meeting to discuss, among other items, the following question it has received on lease modification accounting in light of the COVID-19 pandemic: Are lease concessions related to the effects of COVID-19 required to be accounted for in accordance with the lease modification guidance in Topic 842 Leases?

Podcast: Lodging Sector Facing Protracted Recovery
The lodging sector was one of the first industries to feel the economic brunt of the coronavirus crisis, and it will likely be one of the last to benefit from an eventual upturn, Pebblebrook Hotel Trust Chairman and CEO Jon Bortz said.

April 8:

Data Center Stocks Rise As Demand Surges
Comprising five companies (Digital Realty Trust, Equinix Inc., CyrusOne, CoreSite Realty and QTS Realty Trust), data centers showed a positive gain for the first quarter of 2020, growing by 8.8%.

Pandemic Could Mean Opportunity for Real Estate Investors
Nareit economist Calvin Schnure joins NPR Marketplace to discuss how the pandemic could present an opportunity for real estate investors.

Flight to Quality in Retail Real Estate Expected Post-Crisis
Retail tenants will gravitate to malls and shopping centers that hold dominant positions within their local trade areas as they seek to ensure their profitability following the coronavirus crisis, according to an April 8 Moody’s Analytics webinar.

April 6:

Nareit Letter Requests CECL Deferral for All Registrants (pdf)
Last week, Nareit submitted a letter to the Financial Accounting Standards Board and the U.S. Securities and Exchange Commission requesting the deferral of the new current expected credit losses (CECL) standard for all registrants. Nareit’s request was for the deferral to be temporary and apply to all registrants affected by COVID-19.

REITs, Broader Equity Markets Gave Back Some Gains Last Week
REITs declined in the week ended April 3, with a total return of -7.67%, giving back almost half of the gains they posted the week before. Broader markets were down as well, albeit by a bit smaller amount, with the Russell 1000 having a total return of -2.49%.

Prologis CEO Expects Businesses to Operate with Higher Inventory Levels Post-Crisis
Speaking on an April 6 business update conference call, Moghadam noted that for approximately the past 20 years supply chains have been structured for efficiency. “People have been squeezing more and more inventory out of the system. The supply chains have been longer and longer, so they’re very vulnerable to disruption,” he said.

Nareit Joint Letter Praises Legislation Fixing QIP Drafting Error (pdf)
Nareit joins coalition letter thanking lead sponsors and co-sponsors of legislation to fix qualified improvement property drafting error.

Nareit Joins Coalition Signing Letter to California Governor Newsom (pdf)
Letter requests an executive order to postpone the property tax payment deadline.

REITs are helping their tenants and communities in a variety of ways during the coronavirus crisis.

Submission letter: Nareit Submission to Secretary Mnuchin, Chairman Powell, and Director Calabria regarding Credit Risk Transfer Securities

April 3:

mREIT Executives Shed Light on Recent Market Volatility
In recent weeks, the mREIT sector has borne a disproportionate amount of liquidity-driven market turmoil triggered by the coronavirus crisis. With conditions showing signs of settling, for now, several Nareit mREIT members took a step back to give a first-hand account of what their companies have been dealing with.

REITs Should Prepare for Possibility of Increased Activist Investor Interest Following Crisis
REITs need to take a proactive stance to ensure they are ready to deal with activist investors that could emerge in the wake of the current coronavirus market uncertainty, according to a REIT corporate governance expert. John Haggerty, co-chair, public M&A/corporate governance at Goodwin, told an April 2 webinar that activist investors see increased buying opportunities in the current environment “and are sitting on a lot of cash that has long-duration lockup, so they’ve got it there to use.”

Calvin Schnure Interview on TD Ameritrade Network
Nareit senior economist Calvin Schnure joined the TD Ameritrade Network to discuss this morning’s payroll report and the impact of COVID-19 on employment in the U.S.

Podcast: Leadership Skills Under Close Scrutiny During Periods of Crisis
The latest edition of the REIT Report podcast featured Walt Rakowich on the topic of leadership during a time of crisis. Rakowich became CEO of ProLogis at the height of the economic downturn in 2008 and restored the company’s finances, enabling it to merge with AMB Property Corp. in 2011 to create Prologis, Inc. Rakowich noted that while every crisis is different, "how and why we lead is actually quite consistent."

Calvin Schnure Interview on Cheddar
Nareit Senior Economist Calvin Schnure spoke on Cheddar's "Closing Bell" to discuss March's jobs report and impact of COVID-19 on the market.

April 2:

Lessons from the Global Financial Crisis for the Coronavirus Crisis: Public and Private Real Estate
As the market adjusts to the COVID-19 pandemic, it’s important to keep in mind some of the lessons from the global financial crisis (GFC)—in this case, the lead/lag relationship between REITs and unlisted (or private) real estate. REIT share prices react in real time to market conditions while shocks to private real estate valuations are revealed over time as a result of reporting lags.

April 1:

REITs and Real Estate Related Economic Data to Watch for During the Coronavirus Crisis
So far there have been few reports with hard data on the economic impact of social distancing measures, the most notable exception being the spike in weekly jobless claims to a record 3.28 million in mid-March. Several important data releases are scheduled in the coming weeks. Here’s what to watch.

March 31:

STORE Capital Sees Rebound in Middle Market Following Coronavirus Crisis
STORE Capital Corp. President and CEO Chris Volk said the industries represented in the net lease REIT’s portfolio will remain relevant in the aftermath of the coronavirus crisis. Speaking on a March 31 investor call hosted by Raymond James, Volk added that “as the recovery ensues, the middle market will be rebounding strongly and there’ll be amazing opportunities for STORE to grow.” Volk also noted that STORE’s strong capital base will enable it to withstand the current crisis.

March 30:

$2 Trillion Coronavirus Rescue Package Signed into Law
The relief package includes a vast pool of grants and loans for small businesses, a large expansion of unemployment insurance, new resources to help strained state, local, and tribal governments as they combat this pandemic, funding for affordable housing and homelessness assistance programs, and access to Federal Reserve facilities and programs expected to be leveraged up to $4 trillion for loans, loan guarantees, and purchases of other interests of businesses and others experiencing economic distress during the crisis.

REITs’ Liquidity Resources Will Help Sector Face Coronavirus Challenges Ahead
In the March 30 edition of the REIT Report podcast, Nareit Senior Economist Calvin Schnure highlighted the latest developments in how the coronavirus crisis is impacting the economy and commercial real estate.

Three-day Rally Reduces Recent REIT Losses
Every REIT property sector posted double-digit gains last week. Some of the sectors that had recorded larger declines in the prior two weeks were up 20% or more. The FTSE Nareit All REITs index had a total return of 16.45%, compared to 10.64% for the Russell 1000.

March 27:

Strong Pre-Crisis Real Estate Fundamentals Will Help Sector Navigate Current Volatility
CBRE Chief Global Economist and Head of Americas Research Richard Barkham and CBRE’s Head of Occupier Research, Americas, Julie Whelan, joined the REIT Report to talk about the economy, commercial real estate, and the impact of the coronavirus pandemic. Barkham described the economic impact as “brutal in the short term,” with GDP in the United States likely to contract by 6.3% in the first quarter and 20% in the second quarter. If new COVID-19 infections begin to fall by mid-to-late April, and lockdown situations start to ease from mid-May, “we’re looking to an improved second half and a very strong 2021,” he said.

Nareit’s Calvin Schnure on COVID-19’s Impact on REITs and What’s Next
Calvin Schnure spoke with Commercial Observer to discuss what’s unfolded and how equity and mortgage REITs have been impacted by today’s economic fundamentals.

March 26:

Mortgages, MBS Face Challenges During Coronavirus Crisis
The economic and financial impacts of the COVID-19 crisis are affecting mortgage markets today in several ways. Many investors have sought to shed risk exposures across all asset classes. This has put pressure on prices and liquidity in markets for mortgage backed securities (MBS). In addition, the likelihood that some homeowners may delay or miss their mortgage payments has raised concerns about credit risk in mortgage investments.

Columbia Property Trust in "Good Shape" to Handle Economic Slowdown
In a conference call with SunTrust Robinson Humphrey, Columbia President and CEO Nelson Mills said, "for the next year or two we think we’re in good shape, and we can handle even more of a prolonged downturn—we’ve got some room there."

Nareit Senior Economist on Latest Unemployment Report
Nareit Senior Economist Calvin Schnure: "The record 2.38 million initial jobless claims last week is just the first of many reports that will show the impact of the coronavirus on the economy. The federal stimulus package and Federal Reserve support for financial markets come at a critical moment."

March 25:

Nareit Senior Economist on Bloomberg Radio
Nareit Senior Economist Calvin Schnure spoke on Bloomberg Radio's "Balance of Power with David Westin" about his latest economic outlook in the wake of COVID-19, the impact on commercial real estate, and the differences between the current economic situation and 2008.

What Resources Will REITs Need To Navigate the Coronavirus Crisis?
The main question today is how long the phase of rapid growth of infection and the economic shutdowns necessary to contain it will last. Previously there was a plausible case that these would be measured in weeks. It appears increasingly likely that it will spill into months.

Mortgage REITs, CMBS Markets and the Fed
Growing concerns about the impact of the coronavirus on the economy have caused severe liquidity issues in some asset classes. One of the asset classes that has exhibited significant illiquidity has been agency Commercial Mortgage Backed Securities or agency CMBS.

EPR Properties Anticipates Post-Crisis Rebound in Leisure and Recreation Demand
EPR Properties CEO Greg Silvers he expects to see a surge in demand for out of home leisure and recreation experiences in the wake of the COVID-19 pandemic.

March 23:

Congress Continues to Work on COVID-19 Economic/Health Care Relief Measure
Senate negotiators and Treasury Secretary Steven Mnuchin have been working on an agreement that would help blunt the economic fallout of the coronavirus crisis.

All REIT Sectors Hit With Stock Dip
Conditions worsened significantly over the past week, both in terms of the expected economic impact of the disruptions to activity in response to the virus, and also in stock market returns.

Federal Reserve, Treasury, FHFA Address Financial Ramifications
The Federal Reserve, Treasury and the Federal Housing Finance Agency of FHFA—which regulates Fannie and Freddie—have taken dramatic steps over the past week with the goal of addressing the financial market ramifications of the dramatic reduction in real activity.

Ultimate Economic, Financial Impact of COVID-19 Unclear Until More Progress on Public Health Front
In the latest edition of the REIT Report podcast, Nareit Senior Economist Calvin Schnure said the ultimate economic and financial impact of COVID-19 will be unclear until there is more progress on the public health front. Authorities, meanwhile, are acting quickly to support the economy, including the resurrection of the Federal Reserve’s crisis programs, Schnure noted.

Nareit Joins with Other Groups Asking the Treasury Department for Temporary Like Kind Exchange Relief
The like kind exchange provisions under Code section 1031 require taxpayers to take certain actions within 45 and 180 days after the taxpayer’s property has been exchanged in order for the gains to be deferred. In past disasters, the Treasury Department has deferred the completion of these actions for 120 days to allow taxpayers to first react to the disaster at hand.

March 20:

REITS Prepared for Coronavirus with Cash and Lines of Credit
REITs have prepared themselves for economic uncertainty by building up their stock of cash and cash-like assets and maintaining substantial unused lines of credit. REITs have over $28 billion in cash and nearly $120 billion in untapped lines of credit.

Hawaii State Legislature Suspended Indefinitely
On March 16, Hawaii House and Senate leadership announced that the 2020 legislative session was recessed immediately. During this time, all committee hearings and floor sessions are cancelled. Legislators are being asked to work remotely and continue with constituent work. Prior to the March 16 announcement, SB 2697 SD1, which would temporarily suspend the DPD by REITs, was awaiting a decision by the House Economic Development and Business Committee on March 18.

March 19:

100% of Nareit Survey Respondents Encouraging or Requiring Work from Home
According to the survey, more than 90% of respondents have either changed or plan to change their travel policies, more than 90% have changed or plan to change their conference attendance policies, over half are taking action to ensure business continuity, and all the respondents are either encouraging employees not required to be on-site to work from home or requiring work from home.

Nareit Asks Treasury to Allow Public REITs to Use 90% Stock to Satisfy Their Distribution Requirement
In order to once again provide publicly offered REITs with the flexibility to retain more capital during the current crisis, Nareit requested the Treasury Department to issue new guidance reverting back to a 90%/10% mix for 2020 and 2021.

March 18:

Pain Points in the Coronavirus Crisis
Stock market declines due to the coronavirus crisis are in the headlines, but the main risks in the weeks ahead are elsewhere: in cash flows and liquidity shocks; resiliency of the financial system; and impact on economic fundamentals.

Podcast: Prologis Sees Structural Changes to Logistics Real Estate in Wake of Coronavirus
Chris Caton, global head of strategy and analytics at Prologis, Inc., discusses the impact of COVID-19 on the warehouse and logistics industry. Caton pointed out that logistics real estate has benefited from historic low vacancy rates and strong demand and disciplined supply. Potential customers who have had a difficult time securing space up until now may see that situation change, he said. Investors, meanwhile, are likely to recognize “the relative beneficial attributes of logistics real estate in terms of the long-term demand drivers against other categories that have more uncertainty,” Caton said.

Nareit Coronavirus Second Round Survey Results
Nareit surveyed its membership about operational changes and preparations related to the coronavirus. Thirty-seven REITs (representing most property sectors and more than $220 billion in equity market cap) responded to the survey between March 16 and March 17.

March 17:

What Real Estate Sectors Has The Coronavirus Affected?
The spread of the coronavirus throughout the United States, and efforts to slow that spread, have caused an unprecedented sudden stop to business and consumer activities across the country. Global stock markets have fallen sharply in anticipation of lost revenues and falling asset values. Share prices of REITs moved down as well. Different property sectors face different exposures to the crisis, however, and REIT returns reflect those differences.

March 13:

Podcast: REITs’ Long-Term Leases Provide Some Stability During a Period of Market Turmoil
In the latest edition of the Nareit REIT Report podcast, Nareit senior economist Calvin Schnure highlighted the latest developments surrounding the impact of the coronavirus pandemic on the economy and REITs. Unlike previous market disruptions, such as weather events, “the cause of the (current) disruption is probably going to be a bit longer-lasting, so this could be more severe than what we’ve seen with an earthquake or hurricane. It’s also national and global in scale,” Schnure said.

Coronavirus and the Economy: The Impact Spreads
The advance of the coronavirus within the United States has prompted a corresponding spread of actions aimed at slowing the pandemic. This includes cancellation of many public activities, including sporting events, Broadway shows, schools and colleges and more. As we discussed in a commentary last week, we had anticipated these types of activities would be among those first affected by the health crisis. The new travel ban on travel and some trade from Europe will almost certainly amplify the impact on economic activity.

March 5:

The Coronavirus, Commercial Real Estate and REITs

The coronavirus crisis is rapidly evolving and there is a great deal of uncertainty about the extent and severity. First and foremost, this is a public health issue threatening the health and possibly lives of many people. It is becoming increasingly clear, however, that the disruptions caused by the epidemic will have an impact on economic activity and asset valuations.

Until recently, most of the economic concerns were about activities outside the United States: cruise ships, other travel, the global supply chain and shortages of critical components made in factories in China. With the discovery of infections in several states in this country, however, it appears inevitable that there will be more extensive disruptions and economic losses within the U.S.

To gauge the impact on the U.S. economy and commercial real estate and REITs, it is important to keep in mind the distinction between spending and investment that may be delayed but will take place later, versus spending and investment that is cancelled completely.

We have not faced a crisis like the coronavirus epidemic before, but there have been events like hurricanes, earthquakes, and large-scale labor strikes that caused large but temporary delays in economic activity. Most of these events were followed by a rebound. If the spread of the virus can be slowed, we may see a repeat of the “V-shaped” recovery from the past.

A more severe spread of the disease could cause factory closings, businesses shut down, and a more damaging impact on economic activity. Service businesses, including hotels, airlines, restaurants and movie theaters would feel some of the worst effects. Among REITs, this could affect the lodging and resort sector and regional malls.

Other sectors, however, may feel less of an impact due to their long-term leases. An apartment REIT with low vacancy rates will still have their tenants paying rent, and may not suffer any lost income. Similarly, an office REIT with investment grade tenants is not likely to experience a drop in occupancy or rent receipts. Indeed, if a desire to avoid crowded areas leads more people to do their shopping online, the industrial REITs that operate logistics facilities for shipment of goods bought on the Internet may gain some business.

It is still too soon to tell what scenario is most likely. For now, though, it is important to note that the U.S. economy, with low unemployment, robust job growth and rising incomes, and the commercial real estate sector, with low vacancy rates and rising rents, are about as well-positioned as possible to handle such a shock.

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The Market Commentary blog on reit.com presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership. For more, see our Terms of Use.